Lesson #1: Keep Your Operations Lean And Clean
Lesson #1: Keep Your Operations Lean And Clean
Musk discovered that the launch costs alone would be so high that they would dwarf even the project’s development. “We could figure out ways with small aerospace companies to do a low-cost spacecraft and lander,” he says. “But we could not find a way to do a low-cost launcher, unless we went to the Russians.” Although he is not against turning to others for help per se, Musk thought that the risks of dealing with the Russians would be too high. He did not want to go through all the complications.
With that, Musk decided to create a feasibility study group. Before he was going to move forward, Musk wanted to know if it was even possible to create a low-cost space launch vehicle in America, one that was not only cheap but still equally as reliable. Musk, along with a number of rocket experts studied the issue and came to one conclusion: “The answer was we thought it could be done,” says Musk, and he was the one that was going to do it.
“There is nothing inherently expensive about rockets,” says Musk. “It's just that those who have built and operated them in the past have done so with horrendously poor efficiency.”
And so, Musk created Falcon One. “Falcon One is going to be the lowest cost per flight to orbit of any production rocket,” says Musk. At jut $15 million per lift off, Musk has achieved his goal. “Which means we’re cheaper than the Chinese, cheaper than [the] Russians or anywhere else – and we’re doing it in the United States with American labour costs.”
How has Musk been able to achieve his goal? “I think the reason it’s cheaper is, first of all, we are a private entity and we have a very lean system in here,” he says. “What we have been able to do here at SpaceX is to cherry-pick, you know, the top one or two percent and give them, you know, capital to execute well and a clear mission, which is low cost, reliable access to space, and no other constraints.” To that end, Musk employs just 140 people and refuses to bog them down with bureaucracy.
When Musk first started in the space industry, rockets were designed with quality and performance in mind and little concern with cost. Launching satellites would cost almost three times as much as the actual satellite that was being launched. Today, Musk is happy about how far his company has come, but says that is not what should have people talking. Instead, they should be wondering why everyone is not doing things like him. And, whether it’s building rockets or launching online payment systems, Musk says the number one priority should be on keeping the business a lean, mean, money-making machine.
Lesson 1 Keep Your Operations Lean And Clean
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In 2001, Musk had another one of his many dreams: he wanted to launch a “Mars Oasis” project, landing a miniature greenhouse on Mars. He wanted to see if he could grow food on the planet, which would help pave the way for his long term goal of populating outer space. But when Musk began looking into the project, he immediately ran into a major problem.
Musk discovered that the launch costs alone would be so high that they would dwarf even the project’s development. “We could figure out ways with small aerospace companies to do a low-cost spacecraft and lander,” he says. “But we could not find a way to do a low-cost launcher, unless we went to the Russians.” Although he is not against turning to others for help per se, Musk thought that the risks of dealing with the Russians would be too high. He did not want to go through all the complications.
With that, Musk decided to create a feasibility study group. Before he was going to move forward, Musk wanted to know if it was even possible to create a low-cost space launch vehicle in America, one that was not only cheap but still equally as reliable. Musk, along with a number of rocket experts studied the issue and came to one conclusion: “The answer was we thought it could be done,” says Musk, and he was the one that was going to do it.
“There is nothing inherently expensive about rockets,” says Musk. “It's just that those who have built and operated them in the past have done so with horrendously poor efficiency.”
And so, Musk created Falcon One. “Falcon One is going to be the lowest cost per flight to orbit of any production rocket,” says Musk. At jut $15 million per lift off, Musk has achieved his goal. “Which means we’re cheaper than the Chinese, cheaper than [the] Russians or anywhere else – and we’re doing it in the United States with American labour costs.”
How has Musk been able to achieve his goal? “I think the reason it’s cheaper is, first of all, we are a private entity and we have a very lean system in here,” he says. “What we have been able to do here at SpaceX is to cherry-pick, you know, the top one or two percent and give them, you know, capital to execute well and a clear mission, which is low cost, reliable access to space, and no other constraints.” To that end, Musk employs just 140 people and refuses to bog them down with bureaucracy.
When Musk first started in the space industry, rockets were designed with quality and performance in mind and little concern with cost. Launching satellites would cost almost three times as much as the actual satellite that was being launched. Today, Musk is happy about how far his company has come, but says that is not what should have people talking. Instead, they should be wondering why everyone is not doing things like him. And, whether it’s building rockets or launching online payment systems, Musk says the number one priority should be on keeping the business a lean, mean, money-making machine.
Lesson 1 Keep Your Operations Lean And Clean
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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